Since 1980, the global economy has undergone a dramatic transformation, with the globalization of the labor force, the rise of automation, and—above all—the growth of Big Finance, Big Pharma, and Big Tech. The social democratic consensus of the immediate postwar years has given way to a new phase of capitalism that is leaving workers further behind and reshaping the class structure. The precariat, a mass class defined by unstable labor arrangements, lack of identity, and erosion of rights, is emerging as today’s “dangerous class.” As its demands cannot be met within the current system, the precariat carries transformative potential. To realize that potential, however, the precariat must awaken to its status as a class and fight for a radically changed income distribution that reclaims the commons and guarantees a livable income for all. Without transformative action, a dark political era looms.

Introduction

We are living in a painful time of turbulent economic change. A global market system continues to take shape as the United States petulantly threatens the international order that it helped to create and from which it has gained disproportionately. This era, which began around 1980, has been dominated institutionally by American finance and ideologically by the economic orthodoxy of “neoliberalism.” A hallmark of this transformation has been the increasing redistribution of wealth upwards as rents to those owning property—physical, financial, and “intellectual.” As “rentier capitalism” has risen, working classes have foundered, as those relying on labor have been losing ground in both relative and absolute terms.

In brief, during the past forty years, the global economy has been shaped by neoliberal economics, which, accentuated by the digital revolution, has generated two linked phenomena: global rentier capitalism and a global class structure in which the precariat is the new mass class. Rentier capitalism is making the hardships borne by the precariat much worse.

Industrial capitalism produced a property-owning bourgeoisie and the proletariat; contemporary capitalism is roiling this class structure. Today, the mass class is the precariat, characterized by unstable labor, low and unpredictable incomes, and loss of citizenship rights. It is the new “dangerous class,” partly because its insecurities induce the bitterness, ill-health, and anger that can be the fodder of right-wing populism. But it is also dangerous in the progressive sense that many in it reject old center-left and center-right politics. They are looking for the root-and-branch change of a new “politics of paradise,” rather than a return to a “politics of laborism” that seeks amelioration within dominant institutions and power structures.

The precariat’s needs cannot be met by modest reforms to the existing social and economic system. It is the only transformative class because, intuitively, it wants to become strong enough to abolish the conditions that define its existence and, as such, abolish itself. All others want merely to improve their position in the social hierarchy. This emergent class is thus well-placed to become the agent of radical social transformation—if it can organize and become sufficiently united around a shared identity, alternative vision, and viable political agenda.

The key to understanding the precariat’s transformational position lies in the breakdown of the income distribution system of the mid-twentieth century. To succeed, a new progressive politics must offer a pathway to an ecologically sustainable system that reduces inequalities and insecurities in the context of an open, globalizing economy.

The Rise of Rentier Capitalism

Between 1945 and 1980, the dominant socioeconomic paradigm in industrialized countries outside the Communist Bloc was social democratic, defined by the creation of welfare states and labor-based entitlements. Although there were modest falls in inequality coupled with labor-based economic security, this was no “golden age,” as some historians label it. The period was stultifying and sexist. Putting as many people as possible (mainly men) in full-time jobs under the banner of Full Employment was hardly an emancipatory vision worthy of the Enlightenment values of Egalité, Liberté, and Solidarité.

As the social democratic era collapsed in the 1970s, an economic model emerged now known as “neoliberalism.” Its advocates preached “free markets,” strong private property rights, financial market liberalization, free trade, commodification, privatization, and the dismantling of all institutions and mechanisms of social solidarity, which, in their view, were “rigidities” holding back the market. While the neoliberals were largely successful in implementing their program, what transpired was very different from what they had promised.

The initial outcome was financial domination. The income generated by US finance, which equaled 100% the size of the US economy in 1975, grew to 350% in 2015. Similarly, in the UK, finance went from 100% to 300% of GDP. Both countries experienced rapid deindustrialization as the strength of finance led to an overvalued exchange rate that, by making exports uncompetitive and imports cheaper, destroyed high-productivity manufacturing jobs. Financial institutions, most notably Goldman Sachs, became masters of the universe, their executives slotted into top political positions in the US and around the world.1

Finance linked up with Big Pharma and Big Tech to forge a global architecture of institutions strengthening rentier capitalism, maximizing monopolistic income from intellectual property. The pivotal moment came in 1995 with implementation of the World Trade Organization (WTO)’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), in which US multinational corporations helped secure the globalization of the US intellectual property rights system. This shift gave unprecedented rent-extracting capacity to multinationals and financial institutions.

Patents, copyright, protection of industrial designs, and trademarked brands have multiplied as sources of monopolistic profit. In 1994, fewer than one million patents were filed worldwide; in 2011, over two million were filed; in 2016, over three million. By then, twelve million were in force, and licensing income from patents had multiplied sevenfold. Growth was similar with other forms of intellectual property.

The rent-extracting system was enforced by over 3,000 trade and investment agreements, all entrenching property rights, topped by a mechanism (Investor-State Dispute Settlement) that empowers multinationals to sue governments for any policy changes that, in their view, negatively affect their future profits. This has had a chilling effect on policy reform efforts, notably those seeking to protect health and the environment.

Rentier capitalism has also been bolstered by subsidies, a financial system designed to increase private debt, privatization of public services, and a plunder of the commons. But it contains two possibly fatal flaws. First, the rentiers have been winning too much by rigging the system, raising questions about social and political sustainability. Second, the architects proved mistaken in thinking this framework would bolster the US economy, along with other advanced industrial economies to a lesser extent, at the expense of the rest of the world.

In particular, they underestimated China. When TRIPS was passed, China was inconsequential as a rentier economy. After it joined the WTO in 2001, it started to catch up fast. In 2011, China overtook the US in patent applications; by 2013, it accounted for nearly a third of global filings, well ahead of the US (22%). In 2016, it accounted for 98% of the increase over 2015, filing more than the US, Japan, the Republic of Korea, and the European Patent Office combined.

The main outcome of rentier capitalism, exacerbated by globalization and the digital revolution, is an inexorable erosion of the income distribution system of the twentieth century—the implicit sharing of income between capital and labor that emerged after the Second World War, epitomized by the 1950 pact between the United Auto Workers union and General Motors known as the Treaty of Detroit. Now, all over the world, the share of income going to capital has been rising; the share going to labor, falling. Within both, the share going to forms of rent has been rising.

The social democratic consensus was based on implicit rules. When productivity rose, so did wages. When profits rose, so did wages. When employment rose, so did wages. Today, productivity and employment are rising, but wages remain stagnant or falling.

One factor depressing wages has been the growth of the global labor force, which has expanded by two billion during the past three decades, many of whom have a living standard that is a tiny fraction of what OECD workers were obtaining. Downward pressure on real wages will continue, especially as productivity can rise faster in emerging market economies and the technological revolution makes relocation of production and employment so much easier. Meanwhile, the rentiers will be protected. Antitrust legislation will not be strengthened to cut monopolistic rent-seeking, since governments will continue to protect national corporate champions.

Without transformative changes, those relying on labor will continue to lose; no amount of tinkering will do. Average real wages in OECD countries will stagnate, and social income inequalities will grow. Progressives must stop deluding themselves. Unless globalization goes into reverse, which is unlikely, trying to remedy inequality by forcing up wages, however desirable, will not do much. Raising wages substantially would merely accelerate the displacement of labor by automation.

A Global Class Structure

Just as industrial capitalism ushered in a new class structure, so, too, has rentier capitalism. The emerging structure, superimposed on old structures, is topped by a plutocracy, made up of a small group of billionaires who wield corruptive power. Although mostly in the West, a growing proportion of plutocrats are in Asia and other emerging market economies. Under them is an elite, who serve the plutocracy’s interests while making substantial rental income themselves. Together, these comprise what is colloquially known as the 1%, but, in fact, is much smaller than that.

Below them in the income spectrum is a salariat, a shrinking number of people with labor-based security and robust benefits, from health care to stock ownership. In the post-1945 era, economists predicted that by the end of the twentieth century, the vast majority in rich countries would be in the salariat, with growing numbers in developing countries joining them. Instead, the salariat is shrinking. It will not disappear, but its members are increasingly detached from those below them in the class spectrum, largely because they too gain more in rentier incomes than in wages. Still, their politics may be shaped by what they see happening to their sons and daughters, as well as their grandchildren.

Alongside the salariat is a smaller group of proficians, freelance professionals, such as software engineers, stock traders, lawyers, and medical specialists operating independently. They earn high incomes selling themselves frenetically, but risk early burnout and moral corrosion through excessive opportunism. This group will grow and are influential beyond their number, conveying an image of autonomy. But for the health of this untethered, hard-driving group—and society’s—they need social structures to enforce moral codes.

Below them in income terms is the proletariat, the epitome of the “working class” in the European sense, the “middle class” in the American sense. In the twentieth century, welfare states, labor law, collective bargaining, trade unions, and labor and social democratic parties were built by and for this group. However, it is dwindling everywhere and has lost progressive energy and direction.

Those who pine for the proletariat should reflect on the downside of the proletarian life and what most had to do just to survive. There should be respect for what it achieved in its heyday, but nostalgia is delusional. In reality, many are falling into the emerging mass class, the precariat, which is also being fed by college graduates and dropouts, women, migrants, and others.

Understanding the Precariat

The precariat consists of millions of people in every advanced industrial country and in emerging market economies as well.2 It can be defined in three dimensions: distinctive relations of production (patterns of labor and work), distinctive relations of distribution (sources of social income), and distinctive relations to the state (loss of citizenship rights). It is still a “class-in-the-making” in that it is internally divided by different senses of relative deprivation and consciousness. But in Europe at least, it is becoming conscious of itself as a coherent group opposed to the dominant power structure (a “class-for-itself”).

The distinctive relations of production start with the fact that the precariat is being forced to accept, and is being habituated to, a life of unstable labor, through temporary work assignments (“casualization”), agency labor, “tasking” in Internet-based “platform capitalism,” flexible scheduling, on-call and zero-hour contracts, and so on. Even more important is that those in the precariat have no occupational narrative or identity, no sense of themselves as having a career trajectory. They also learn they must do a lot of work-for-labor, work-for-the-state, and work-for-reproduction of themselves.3 The need to adapt capabilities in a context of uncertainty leads to the precariatized mind, not knowing how best to allocate one’s time and thus being under almost constant stress.

The precariat is also the first mass class in history in which their typical level of education exceeds that required for the kind of labor they can expect to obtain. And it must work and labor outside fixed workplaces and standard labor hours as well as within them.

The precariat exists in most occupations and at most levels within corporations. For example, within the legal professions, there are elites, a squeezed salariat, and a precariat of paralegals. Similar fragmentation exists in the medical and teaching professions, with paramedics and “fractionals” (i.e., those remunerated for only a fraction of full-time). The precariat is even spreading into corporate management with a concept of “interim managers,” some of whom are well-paid proficians (depicted by George Clooney in Up in the Air), others of whom fall in the precariat.

Along with the rise of unstable labor, the second dimension is distinctive relations of distribution, or structures of social income.4 The precariat relies mainly on money wages, which have been stagnant or falling in real terms for three decades, and which are increasingly volatile. The precariat’s income security has fallen correspondingly. Also, as many must do much unpaid work, the wage rate is lower than it appears if only paid labor time is taken into account. This trend will only intensify with the spread of “tasking” through online platforms.

Further, the precariat has been losing non-wage forms of remuneration, while the salariat and elite have been gaining them, making the growth of social income inequality greater than it appears in conventional income statistics. The precariat rarely receives paid holidays, paid medical leave, subsidized transport or accommodation, paid maternity leave, and so on. And it lacks the occupational benefits that came with belonging to a professional or craft guild.

The precariat has also lost entitlement to rights-based state benefits (welfare). The international trend towards means-testing and behavior-testing has hit them hard and engulfed many in regimes of workfare. Means-testing creates poverty traps, since benefits are withdrawn when earned income rises. Going from low state benefits into low-wage jobs on offer thus involves very high marginal “tax” rates, often over 80%. The precariat also faces “precarity traps”: obtaining benefits takes time, so if you succeed in obtaining them, it would be financially irrational to leave for a low-paying short-term job alternative.

The precariat has also been losing access to family and community support, as well as to commons resources and amenities, all of which have been underestimated sources of income security for low-income groups throughout the ages. For the precariat, they are just not there. Instead, many are driven to food banks and charities.

Key to the precariat’s income insecurity is uncertainty. Uncertainty differs from contingency risks, such as unemployment, maternity, and sickness, which were core focuses of welfare states. For those, one can calculate the probability of such events and develop an insurance scheme. Uncertainty cannot be insured against; it is about “unknown unknowns.” The social security part of the distribution system has also broken down, and social democrats should stop pretending it could be restored.

The precariat also suffers from an above-average cost of living. They live on the edge of unsustainable debt, knowing that one illness, accident, or mistake could render them homeless. Needing loans and credit, they pay much higher interest rates than richer folk.

The third defining dimension consists of the precariat’s distinctive relations to the state. The proletariat went from having few rights to having a rising number—cultural, civil, social, political, and economic. By contrast, the precariat is losing such rights, often not realizing so until need for their protection arises. For instance, they usually lack cultural rights because they cannot belong to communities such as occupational guilds that would give them security and identity. They lack civil rights because of the erosion of due process and inability to afford adequate defense in court; they often lose entitlement to state benefits on the whim of unaccountable bureaucrats. They lose economic rights because they cannot work in occupations they are qualified to perform.

The loss of rights goes with the most defining feature of the class: the precariat consists of supplicants. The original Latin meaning of precarious was “to obtain by prayer.” That sums up what it is to be in the precariat: having to ask for favors, for help, for a break, for a discretionary judgment by some bureaucrat, agent, relative, or friend. This intensifies uncertainty. To be in the precariat, it has been said, is like running on sinking sand.

Experience of supplicant status leads to the precariat’s growing consciousness. Chronic insecurity induces anxiety, but as with all emerging classes, there are different forms of relative deprivation. The precariat is split into three factions, which has hindered its becoming a class-for-itself and is challenging for those wishing to develop and organize a progressive response.

The first faction is the Atavists. They have fallen out of the proletariat, or come from old working-class families or communities whose members once depended on full-time jobs. Some are young; many are older, looking back wistfully. Their deprivation is about a lost Past, whether real or imagined. Having relatively little schooling or education in civics, history, or culture, they tend to listen to the sirens of neo-fascist populism.

They have been voting for the likes of Trump, Putin, Orban, Marine Le Pen, Farage and other Brexiteers, and the Lega in Italy. It is not correct to call them the “left behind,” since they are expected to function inside a new labor market. But they are bitter, eager to blame others for their plight. Those they demonize comprise the second faction of the precariat, the Nostalgics. This group is composed of migrants and minorities, who feel deprived of a Present, with nowhere to call home. For the most part, they “keep their heads down,” doing whatever they can to survive and move forward.

The third faction is best described as the Progressives, more educated and mainly young, although not exclusively so. Their defining sense of deprivation is loss of a Future. They went to university or college, promised by their parents and teachers that this would lead to a defining career. They emerge without that, often with debt stretching into that future. Beyond their own future, more and more despair about the planet’s ecological future.

A challenge for aspiring politicians is to build a broad policy strategy for bringing all three factions together in common cause. That is beginning to happen, so it is unnecessarily pessimistic to think a new progressive politics cannot be forged for the precariat as a whole.

The Dangerous Class

The precariat is today’s “dangerous class,” because it is the part of the emerging class system that could carry forward social transformation. For Marxists, the term “dangerous class” is associated with the “lumpen-proletariat,” those cut off from society, reduced to crime and social illness, having no function in production other than to put fear into the proletariat. But the precariat is not a lumpen. It is wanted by global capitalism, encapsulating new norms of labor and work. continue

Neoliberalism has created genuine grievances, exploited by the radical right. The left must find a new way to articulate them

By Chantal Mouffe The Guardian

Sept 10, 2018 – These are unsettled times for democratic politics. Shocked by the victory of Eurosceptic coalitions in Austria and in Italy, the neoliberal elites – already worried by the Brexit vote and the victory of Donald Trump – now claim democracy is in danger and raise the alarm against a possible return of “fascism”.

There is no denying that western Europe is currently witnessing a “populist moment”. This arises from the multiplication of anti-establishment movements, which signal a crisis of neoliberal hegemony. This crisis might indeed open the way for more authoritarian governments, but it can also provide the opportunity for reclaiming and deepening the democratic institutions that have been weakened by 30 years of neoliberalism.

Our current post-democratic condition is the product of several phenomena. The first one, which I call “post-politics”, is the blurring of frontiers between right and left. It is the result of the consensus established between parties of centre-right and centre-left on the idea that there was no alternative to neoliberal globalisation. Under the imperative of “modernisation”, social democrats have accepted the diktats of globalised financial capitalism and the limits it imposes on state intervention and public policies.

Politics has become a mere technical issue of managing the established order, a domain reserved for experts. The sovereignty of the people, a notion at the heart of the democratic ideal, has been declared obsolete. Post-politics only allows for an alternation in power between the centre-right and the centre-left. The confrontation between different political projects, crucial for democracy, has been eliminated.

This post-political evolution has been characterised by the dominance of the financial sector, with disastrous consequences for the productive economy. This has been accompanied by privatisation and deregulation policies that, jointly with the austerity measures imposed after the 2008 crisis, have provoked an exponential increase in inequality.

The working class and the already disadvantaged are particularly affected, but also a significant part of the middle classes, who have become poorer and more insecure.

In recent years, various resistance movements have emerged. They embody what Karl Polanyi presented in The Great Transformation as a “countermovement”, by which society reacts against the process of marketisation and pushes for social protection. This countermovement, he pointed out, could take progressive or regressive forms. This ambivalence is also true of today’s populist moment. In several European countries those resistances have been captured by rightwing parties that have articulated, in a nationalistic and xenophobic vocabulary, the demands of those abandoned by the centre-left. Rightwing populists proclaim they will give back to the people the voice that has been captured by the “elites”. They understand that politics is always partisan and requires an us/them confrontation. Furthermore, they recognise the need to mobilise the realm of emotion and sentiment in order to construct collective political identities. Drawing a line between the “people” and the “establishment”, they openly reject the post-political consensus.

Those are precisely the political moves that most parties of the left feel unable to make, owing to their consensual concept of politics and the rationalistic view that passions have to be excluded. For them, only rational debate is acceptable. This explains their hostility to populism, which they associate with demagogy and irrationality. Alas, the challenge of rightwing populism will not be met by stubbornly upholding the post-political consensus and despising the “deplorables”.

It is vital to realise that the moral condemnation and demonisation of rightwing populism is totally counterproductive – it merely reinforces anti-establishment feelings among those who lack a vocabulary to formulate what are, at core, genuine grievances.

Classifying rightwing populist parties as “extreme right” or “fascist”, presenting them as a kind of moral disease and attributing their appeal to a lack of education is, of course, very convenient for the centre-left. It allows them to dismiss any populists’ demands and to avoid acknowledging responsibility for their rise.

The only way to fight rightwing populism is to give a progressive answer to the demands they are expressing in a xenophobic language. This means recognising the existence of a democratic nucleus in those demands and the possibility, through a different discourse, of articulating those demands in a radical democratic direction.

This is the political strategy that I call “left populism”. Its purpose is the construction of a collective will, a “people” whose adversary is the “oligarchy”, the force that sustains the neoliberal order.

It cannot be formulated through the left/right cleavage, as traditionally configured. Unlike the struggles characteristic of the era of Fordist capitalism, when there was a working class that defended its specific interests, resistances have developed beyond the industrial sector. Their demands no longer correspond to defined social groups. Many touch on questions related to quality of life and intersect with issues such as sexism, racism and other forms of domination. With such diversity, the traditional left/right frontier can no longer articulate a collective will.

To bring these diverse struggles together requires establishing a bond between social movements and a new type of party to create a “people” fighting for equality and social justice.

Forget Trump – populism is the cure, not the disease

We find such a political strategy in movements such as Podemos in Spain, La France Insoumise of Jean-Luc Mélenchon, or Bernie Sanders in the US. This also informs the politics of Jeremy Corbyn, whose endeavour to transform the Labour party into a great popular movement, working “for the many, not the few”, has already succeeded in making it the greatest left party in Europe.

Those movements seek to come to power through elections, but not in order to establish a “populist regime”. Their goal is to recover and deepen democratic institutions. This strategy will take different forms: it could be called “democratic socialism”, “eco-socialism”, “liberal socialism” or “participatory democracy”, depending on the different national context. But what is important, whatever the name, is that “democracy” is the signifier around which these struggles are articulated, and that political liberal institutions are not discarded.

The process of radicalising democratic institutions will no doubt include moments of rupture and a confrontation with the dominant economic interests. It is a radical reformist strategy with an anti-capitalist dimension, but does not require relinquishing liberal democratic institutions.

I am convinced that in the next few years the central axis of the political conflict will be between rightwing populism and leftwing populism, and it is imperative that progressive sectors understand the importance of involving themselves in that struggle.

The popularity in the June 2017 parliamentary elections of Mélenchon, François Ruffin and other candidates of La France Insoumise – including in Marseille and Amiens, previous strongholds of Marine Le Pen – shows that when an egalitarian discourse is available to express their grievances, many people join the progressive struggle. Conceived around radical democratic objectives, populism, far from being a perversion of democracy – a view that the forces defending the status quo try to impose by disqualifying as “extremists” all those who oppose the post-political consensus – constitutes in today’s Europe the best political strategy for reviving and expanding our democratic ideals.

Chantal Mouffe is professor of political theory at the University of Westminster

Base-Superstructure Theory (BST) is Marx’s guiding general theory, but is long misunderstood. Deeply embedded in a monumental corpus of system-challenging analysis, it has become lost in secondary interpretations with partial takes and opposed propagandas militating against coherent comprehension. Within the last 35 years, there has also been a sea-shift of global culture to anti-foundationalist relativism which has uprooted the very idea of a common base or ground, Marx’s ‘economic base’ most vehemently of all.

By Prof. John McMurtry

MR-Online via Global Research

December 23, 2017

The Productive Base as the Ground of Society and History

One basis for life and another basis for science is an a-priori lie -–Karl Marx, Economic and Philosophical Manuscripts, 1845.

Within a dominant post-1991 cultural assumption that ‘Marxism is dead’, the BST has been essentially abandoned even by Marxists as ‘postmodernist’ and ‘identity politics’ tides sweep across the West. Yet Marx’s overall historical materialist principle remains intact within the academy – that the material conditions of historical societies – opposed to God or human concepts – determine human affairs. This first ontological step of Marx’s general theory repudiates the conceptual idealism of philosophy from Plato to Hegel which supposes that disembodied Ideas determine material reality, rather than the other way round. Marx introduces this foundational principle of the BST (emphasis added as henceforth):

Men can be distinguished from animals by consciousness, religion, or anything else you like. They themselves begin to distinguish themselves from animals as soon as they begin to produce their means of subsistence.

This is Marx’s ‘productive base’, usually referred to as Productivkraften or ‘productive forces’. This production beyond Nature’s available provisions increasingly “subjugates Nature to its sway” (Capital, “On the Labour Process”). Yet Marx’s work takes on the revolutionary political edge for which he is most famous in the iconic Manifesto of the Communist Party in 1848. Here his philosophy of society and history moves to a sweeping 10-Point social program, much of it instituted within the next century – extension of existing industrial development to state ownership, graduated income tax, free education for all children by public schools, and a national bank. Marx’s theory has been in this way largely proven in practice against the standard assumption to the contrary.

Yet it is not until his 1859 Preface to A Contribution to the Critique of Political Economy, that Marx defines his general theory with his base-superstructure model as “the guiding thread of my studies”. Since this canonical statement carried through in Das Kapital is widely misconceived as a mechanistic determinism in which all elements of society are uniquely determined by the ruling economic system, it requires close inspection.

In the social production which men carry on”, Marx begins his paradigm statement, “they enter into definite relations that are indispensable and independent of their will.

While this is usually thought to be a statement against humanity’s free will, it is more modestly a statement of unacknowledged fact about the ‘free society’ capitalism is assumed to be. Wage or salary work must be done by the great majority to stay alive “independent of their will”. Their “definite relations” are materially determined by the employer who must achieve the lowest costs with ‘no choice in the matter’. And behind this “wage slavery”, Marx emphasises in Capital, lies the further unacknowledged horrific historical fact of the “great expropriation of the people from the soil, from the means of subsistence, and from the means of labour – [by] violent and painful methods”. They must sell their labour into servitude, or they do not survive. This servitude, Marx documents, is enforced by mass hangings, mutilations, floggings, pillories, and deprivation of children.

Yet Marx acerbically rejects any kind of voluntarism as an alternative. The mode of production that produces a society’s means of life must, he argues, be developed to a stage where the direct producers are effectively organised to historically replace the ruling capitalist system of social production. This is why he asserts as the guiding framework of his work:

production relations must correspond to a definite stage of development of men’s material powers.

This is ‘the productive base’ on which slave-owning, feudal or capitalist social systems are raised in their turn, but which ruling cultures assume as ‘everlasting’. Marx summarizes in this central statement of his general theory that the “the totality of these relations of production constitutes the economic structure of society– the real foundation [or base] on which the legal and political superstructurearises”.

Marx is opposed to the ruling determinism, but organises the facts as they are against ‘ideological illusions’ – the essential method of his base-superstructure theory. While many claim Marx denies the autonomy of individual consciousness, or free choice, or democracy, or all at once, his master verb for superstructure determination by the economic base is entsprechen- to correspond to or comply with. This means that the state and legal institutions of a society must comply with the ruling ownership structure society’s forces of production, or be selected out as materially unviable. This is why Marx says in his Preface to Capital,

My standpoint can less than other make the individual responsible for relations for whose creature he socially remains, however much he may subjectively raise himself above them (emphases again added as elsewhere).

Marx insists against most philosophy that subjectivism is incapable of understanding the real world or changing it. This is why he ridicules Kant’s ‘moral will’ as an impotent deontology that excludes consequences a-priori; and why he mocks Max Stirner’s ‘Omnipotent Ego’, neo-Hegelianism, and all commentary which revolves within “consciousness in itself”. Marx’s Theses on Feuerbach is the iconic expression of this unprecedentedly activist ontology and epistemology and the philosophical ground of his base-superstructure theory:

The dispute over the reality or non-reality of thinking which is isolated from practice is a merely scholastic question (Thesis II).

Marx would be hard on most postmodernism, analytic theory, and academia in general today, and this may be why they are all inclined to pooh-pooh Marx. Yet his BST is most easily de-mystified when reading attends to its straightforward material model – a building foundation and a superstructure raised upon it. No superstructure can stand without a foundation, and this could be called an ‘inexorable law’. But this does not mean the superstructure conforms to the base by ruling out all alternatives within its range of permission. Nor, conversely, does it mean that the base will change in virtue of those alternatives in the mind, even if socialist. Superstructural phenomena must, in Marx’s BST, comply with the underlying mode of production, or face strong selective pressures to extinction. Thus Marx argues that the laws, policies and state in a society correspond to the productive base to survive, and why he disparages those who think a legal proclamation will change social reality if there are not the material conditions to enable it to occur. In logical terms, Marx’s meaning may be summarized without his militant mood: legal, state and ideological phenomena must be consistent with the society’s material reproduction at the established level of society’s productive provision of means of existence, or go under.

Social Being Determines Consciousness

Marx continues his BST ‘guiding thread’ to write that “definite forms of social consciousness correspond to a society’s mode of production”. This has led to many competing interpretations, dogmas and denunciations. Yet to test it, one may ask: where is there not correspondence in global capitalism between ‘ruling forms of social consciousness’ and ‘the economic structure’? More specifically, do we find that the dominant meanings of “freedom”, “responsibility”, “productivity”, “and “justice” are do not comply with the capitalist system? An easy refutation would be any published conception of these anchoring normative concepts which opposes, say, the rightness of private profit, or rejects the assumption that citizens must sell their services to employers as their duty to society.

Marx continues his explanation with perhaps the most controversial sentence of his base-superstructure theory.

It is not the consciousness of men that determines their being, but, on the contrary, their social being determines their consciousness.

For this, Marx is held to be declaring a materialist reductionism, or the epiphenomenal nature of human thought, or denial of moral choice, or undialectical simplification, or a soulless doctrine. In fact, Marx only repudiates any theory which excludes material foundations from its understanding. Thus received philosophers and press commentary, for example, are ridiculed by Marx and more specifically, religio-moral certitudes reflecting ruling-class interests. Yet since all words and languages are social constructions, Marx’s claim is obviously true in a now accepted way. The most studied philosophers of the twentieth century, Martin Heidegger and Ludwig Wittgenstein, for example, declare language as the “home of Being” and “the limit of thought” respectively, and contemporary etymology usually presupposes language’s social and historical nature. Marx’s claim that “social being determines consciousness” is hardly controversial today except that Marx’s BST further argues that the social is y determined by the capitalist economic structure that must and will be overthrown. In Marx’s BST terms without his militance, this line of thought is rejected by official society as unacceptable. This is how, as Marx provocatively describes it in many different contexts, a realm of illusory cover stories and concepts blinker out the capitalist system’s oppressive exploitations while purporting the highest moral motives. Consider Marx’s bitingly witty asides in this light:

The Church of England will more readily pardon an attack on its Thirty-Nine Articles than 1/39th of its income.

This is the same Marx that in The Holy Family talks of religion as the “spirit of spiritless conditions, the heart of a heartless world” – thus resonantly affirming the spirit and the heart that he is said to deny. What he is in fact castigating is the capitalist church and its rich investments, rents and hypocrisies exploiting the populace and grinding the poor. Marx’s BST analysis also lays bare the institutionalised veils of doctrine masking the cupidity of the Conservative Party and its Lords:

“The high Tory hymns the beauties of the British Constitution, the Crown and the Law until the day of danger snatches from him the confession that he is interested only in – Ground Rent.”

Marx’s base-superstructure method of laying bare private capital gain underneath moral pomposity and the robes of religion, the constitution, and the law still applies to, say, US politicians’ invocation of ‘God’s blessing’ and ‘our sacred Constitution’ – why Marx may be so abhorred by establishments across the world.

Freedom in Marx’s Base Superstructure Theory

Long the primary reason for repudiating Marx’s base-superstructure theory has been its alleged denial of individual freedom. Yet his work from the beginning is devoted to freedom as of ultimate value, preferring Epicurus to Democritus in his doctoral thesis solely because the theory of Epicurus allowed freedom into an arbitrary “swerve” of atoms against the “far more scientific” Democritus who is a mechanist. Yet there is an implicit principle of ‘technological determinism’ as the ultimate regulator of Marx’s base-superstructure theory. Few understand that this position rules out the success of state seizure for socialist revolution without a developed productive base to sustain it – as history since Marx has significantly confirmed. Marx also predicts social transformation to a “many-sided” working class “ready and able to meet any change of production;” as well as technological replacement of labour to allow “free time” from “the realm of necessity” – opposite positions to a denial of human freedom.

In spite of Marx’s failed prediction of ‘inevitable revolution’ in advanced industrial societies, Marx is rather prescient in anticipating the material possibilities of freedom by technological and worker development, and how they are ‘fettered’ by the capitalist economic structure within which all lower-cost benefits of technological advances like labour-saving machinery go to capitalists as the working day increases. Marx’s evolving productive base is throughout grounded in humanity’s distinguishing feature as a species and the origin of human freedom: “the capacity to raise a project in the head before it is constructed in reality”. (Capital, “On the Labour Process”). A socially self-directing mode of production with socialist plan is the meta version of this built-in human freedom.

This distinguishing ground of historical materialism is brought into revealing alliance with Darwin’s classical Origin of the Species when Marx connects “nature’s technology” to human society’s “organs of technology” as the ultimate basis of historical development:

Darwin has interested us in the history of Nature’s Technology i.e., in the formation of the organs of plants and animals, which organs serve as instruments as of production for sustaining life. Does not the history of the productive organs of man, of organs that are the material basis of all social organization, deserve equal attention? (Capital, “The Development of Machinery”).

In his still under-theorized evolutionary theory, Marx goes beyond Darwin in arguing that:

the forces of selection are increasingly social, not natural, and organic instruments are evolved by creative cooperative production, not instinctual repertoires or genes.

Marx’s base-superstructure theory is the framework within which historical as opposed to natural evolution develops, and human capacity self-realization not species reproduction numbers is its logic of advance.

Economic Determinism, Darwinian Selection and Social Revolution

Marx’s implicit principle of economic determination by extinction of what does not fit the ruling property order is evolutionary biology at the historical level, As Marx says in his Preface to Capital,

the economic formation of society is viewed as a process of natural history.

In fact, however, history is not a natural process as its laws are made not found in nature, and Marx’s own theory implicitly seeks human society’s supersession of nature’s ultimate law of dominance by physical force.

Yet both evolutionary and historical materialist theories recognise selection and extinction of life forms that adapt or not, survive, flourish or die, in the struggle for continued life. Marx, however, argues for the revolutionary necessity of surpassing the brutality of natural evolution by working-class overthrow of the ruling class system of “hitherto existing society” which always “pumps out surplus labour from the direct producers” to enrich masters, lords or capitalists” (Capital III, “Genesis of Capitalist Ground-Rent”). Marx’s ultimate goal is liberation from capitalist class rule, in his theory the last to rule society against its common interests with productive development the material base of this revolution. For Marx’s BST, however, species liberation only becomes historically possible with industrial mass production to organise it. Human survival and extinction, class domination and overthrow are based on technological development which eventually outgrows the old form of control and appropriation of society’s means of production to bring about a higher stage of society led by the direct producers themselves.

Marx’s revolutionary theory is the most controversial element of his explanatory model, and has so many versions that it helps to define its inner logic in dispassionate terms:

a social revolution in a society’s law, politics and ideology is propelled by ever more open class struggle to achieve a higher stage of development of the productive base of society than the prior ruling-class economic structure can manage without forfeit of society’s stage of material production.

In the rare periods of successful social revolution, Marx offers an original causal explanation: Only when productive force development goes beyond the fetters of the established ruling-class relations of production can a social revolution occur. Marx’s guiding framework is concisely stated by his ‘guiding thread’ (with possible application to contemporary society in square brackets:

At a certain stage of their development, the material forces of production [think of the Internet] come into conflict with the existing relations of production – or – what is but a legal expression for them – with the property relations within which they had been at work before [private -profit copyright, patent and control over published meanings]. From forms of development of productive forces, these relations [of corporate ownership profit] turn into their chains. Then occurs a period of social revolution [the creators of knowledge deciding on commons publication and open access in cumulative transition from the for-profit ‘information economy’ to the ‘knowledge commons’].

At the macro level of interface with evolutionary biology, Marx’s BST suggests new technologies as the ‘organic extensions of human society’ outgrowing the ruling ownership ‘anatomy’ to necessitate society’s transformation to a higher and more productive form. A society, he writes in introducing Capital, is an “organism always changing” while the “birth-pangs of revolution” presuppose a long process in “the natural laws of its movement” which “can neither clear by bold leaps, nor remove by legal enactments the obstacles involved – – but can shorten the and lessen the birth-pangs”. The underlying common ground of both disjunctive and cumulative-transition understandings of this social transformation is that any uprising social organisation of material forces must be more efficient and productive than the one now ruling . This is an understanding that has, ironically, been seized upon by counter-revolutions across the world since wherein external capitalist powers deliberately destroy socialist life bases by armed and financial means – the converse of Marx’s revolutionary theory. Marx asserts in his definitive BST explanation:

No social order ever disappears before all the productive forces for which there is room in it have been developed, and new higher relations of production never appear before the material conditions have matured in the womb of the old society.

Counter-revolutions prevent this evolution of the ruling mode of production ever succeeding.

Self-Maximizing Growth and Marx’s Aporia of Productive Object

Marx’s base-superstructure theory implicitly recognises that the ultimate value base and driver of capitalism is the “fully developed shape [of] the money form” in terms of which all decisions of what commodities to produce and how they are produced are made solely to maximize revenue returns to private capital owners in cycles of increasing accumulation: in general formula Money-Commodity-More Money or M-C-M1 . As Marx also argues, capitalist investors are “personifications of economic categories, embodiments of particular class relations and class interests”, and so are a-priori indifferent to what life is degraded, exploited and destroyed in multiplying private money profits with no cumulative limit (Marx’s Preface, Chapter I, and Chapter XXV of Capital).

While Marx’s BST is confirmed by capitalist history, a deep-structural issue emerges. How can Marx or his followers believe that the results of this totalizing system of life oppression, immiserization and life capital rundown must “inevitably” result in a completely opposite outcome of “social revolution”, “dictatorship of the proletariat”, and “from each according to his ability, to each according to his need”? There is no clear definition of any step of this historical vision. Most deeply, there is no answer to the question: what is the criterion of the life needs that production is ultimately for?

Marx focuses rather on the socialist logic he sees built into competing large scales of capitalist production – “an ever-expanding scale, the co-operative form of the labour process, the conscious technical application of science, the methodical cultivation of the soil, the transformation of the instruments of labour in instruments of labour only usable in common, the economising of all means of production by their use as means of production of combined socialised labour, the entanglement of all peoples in the net of the world-market, and with all this the international nature of the capitalistic regime” (Capital, Chapter XXXII). Marx’s analysis here is breathtaking in scope, but what remains absent is the underlying life base and laws of any productive force development and exponential growth. That this development must be consistent with the universal needs and capacities of humanity, its natural biosphere and fellow creatures does not enter into Marx’s base-superstructure theory as an issue (nor mainstream theories today). As with the capitalist epoch in general, technological development seems to be a secular Providence that can solve any problem.

In Capital, Marx restricts the parameters to be considered to the technology used and collective wage labour as historical agency.

The wealth of those societies in which the capitalist mode of production prevails”, he writes in his first sentence of Capital presents itself as “an immense accumulation of commodities.

The commodities of which all wealth consists in capitalist society are always produced in accordance with the master organising principle of their production and profit, M-C-M1 , the capitalist value-system Marx first defines. This ‘immense accumulation of commodities’ are the values of this system in whatever form they take, and are defined in the same first page of Capital as material use-values for wants – – – whether they spring from the stomach or fancy makes no difference”. Marx underlines this criterion of commodities by his approving footnote citing Nicholas Barbou’s subjectivist principle:

Want is the appetite of the mind and as natural as hunger to the body.

It is this commodity base – and all capitalist productive forces are commodities – which constitutes the productive forces to drive the ‘inevitable proletarian revolution’.

Since all these productive and consumer commodities are driven ex hypothesi by systemic compulsion to sell anything to moneyed desires for the lowest inputs costs and highest profits over generations, there is a problem of transition to socialism that is not met. The depredatory effects on organic and ecological life systems of these capitalist productive powers and consumables across generations are not recognised or regulated to prevent them in theory or practice. With no defined life standards or criteria to distinguish life-destructive from life-enabling productive forces and products, how can the cumulative looting and polluting of humanity’s and other species’ life support systems by global capitalism be reversed when they are conceived as “development” even by Marx?

Marx envisions in his Grundrisse notebooks to Capital a future state in which “once the narrow bourgeois form is peeled away”, there can be “the evolution of all human powers as such unmeasured by any previously established yardstick”. But what if the ‘bourgeois form’ cannot be peeled away because it built into the productive forces themselves? The life-base standards definable at every level do not exist. In Capital Volume II, Marx is poignantly unaware of the problem when he says (emphases added):

Regardless of whether such a product as tobacco is really a consumer necessity from the physiological point of view, it suffices that it is habitually such.

We see here the relativization of life necessity to habitual wants which can drive productive forces through the human organism and the biosphere with no life-carrying capacity limits defined in even Marx’s BST.

Re-Setting Base-Superstructure Theory to the Life Ground

Marx’s base-superstructure theory begins with humanity distinguishing itself from other animals by production of the means of life. Yet ‘means of life’ disappears as a category after 1847 in Marx’s corpus, and is replaced on the first page of Capital by commodities serving desires not needs. Productive forces since increasingly mass-manufacture commodities which are disabling and addictive in their consumption – even in a communist-party society moving from mass bicycle riding to fossil-fuel motors toxifying the air and environment. Marx conceives commodities as values because they embody labour hours. Yet if we take into account the life and life capital effects of industrial commodities from extraction through processing to product through consumer bodies to wastes through the biosphere – all in motion in Marx’s day – a darker picture emerges than ‘productive force development’ and ‘‘immense wealth of commodities’ to ground socialist revolution. Nowhere does any measure of life capital enter into theory or measure. True productive value measured by the yardstick of life capacity gained versus lost is not conceived. As in capitalism before and since, the “precision of natural science” Marx attributes to “the material mode of production” lacks any criteria which we may call life capital standards to meet this fatal problem. Life-degrading commodities and machines cannot be selected against even by revolutionary socialism if there is no regulating principle whereby to recognise them. It seems that Marx’s first principle in the Economic and Philosophical Manuscripts has dropped out of view:

One basis for life and another basis for science is an a-priori lie.

The Missing Life Capital Base of Marx’s Base-Superstructure Theory

Re-set of Marx’s base-superstructure theory to principled consistency with life capital standards is the missing foundation, and the measure of life capital necessity is undeniable once defined. Any material need or necessity is that without which life capacities of any kind are reduced or die – from oceans to songbirds to human brains. While Marx’s BST abstracts out this life base of the productive base, it seems implicitly presupposed in both his attacks on the capitalist system and his revolutionary alternative to it. One may test the italicised principle by seeking any denunciation or affirmation of Marx’s analysis which does not conform to it. So can Marx’s BST be re-set to include this life base and measure? There is only way do so, and that is by comprehension of the following three moments of any coherent value system that

(i) produces more life value

(ii) without loss and

(iii) with cumulative gain.

The sole concept which comprehends these three moments is life capital – what may also be called true capital – whose collective form includes every social asset through time from the sciences and arts to stable hydrological cycles to a public healthcare system to pollution-abating and recycling technologies to regional biodiversity and arable lands to aquifers, rivers, sewers and filter systems. In fidelity to Marx’s method which understands social systems in terms of social relations rather than atomic aggregates, this missing concept may be modified as ‘collective life capital’. In onto-axiological terms, any life capital at all is only coherent if it reproduces and gains consistently with other life capital: as follows from Marx’s principle of “from each according to his ability, to each according to his needs”.

The Productive Agency of Social Transformation 150 Years after Capital

Marx believed that industrial workers (the proletariat) would rise up around the world (Source: Wikimedia Commons)

At the heart of Marx’s base-superstructure theory, the concluding pages of Capital contend that the industrial working class or proletariat is “disciplined, united, organised by the very mechanism of the process of capitalist production itself” to revolt against it. Yet a logical slippage occurs here. For within “this very mechanism of capitalist production”, no purpose is allowed but to serve the M-C-M1 “law of motion of modern society” which, by Marx’s own description, operates solely to lower money costs for capitalists to pump out maximum profit. What has gone unnoticed is a fallacy of equivocation between the production process of workers bound to strict servitude within the industrial workplace and workers joining together outside this workplace on the basis of their collective life interests. As Marx himself says in Wage Labour and Capital,

Life only begins for the labourer where his bought labour ceases.

Marx further claims in this signature passage that the industrial proletariat is “growing in revolt” and “always increasing in numbers”. Here the error is not logical, but historical. The industrial proletariat since Marx’s Capital has been increasingly replaced by automated systems which in the last half century have multipled industrial job reduction, separation of work functions into globally scaled assembly-lines, and deprivation of collective worker leverages of strike, union association, local market demand, and job security. Here again Marx’s base-superstructure theory of social transformation needs to be re-set to remain applicable. The class most superseding and displacing the industrial proletariat is one of knowledge workers who emerge everywhere that symbolic practices replace physical inputs in production. Yet Marx’s First Preface to Capital where his general theory is most evident as in his previous Preface to A Contribution to the Critique of Political Economy (bear in mind that a Preface is a traditional location for a work’s lodestone of meaning to be generically defined) is far-seeing in a way that has not been recognised. Marx implicitly conceptualises the leading edge of the knowledge class and its public- sector economic base as a transformative agency of developed industrial society across life domains:

where there are plenary powers to get at the truth (Marx’s emphasis): if it was possible to find for this purpose men as competent, as free from partisanship and respect of persons as are the English Factory inspectors, her medical reporters on public health, her commissioners of inquiry into the exploitation of women and children, into housing and food”.

Observe how encompassing these ‘plenary powers to get at the truth’ are. Observe how even in a capitalist society Marx supports the knowledge-formation capacities of public servants to be competent, free from bias, and respectful of persons. Observe how he exactly endorses their existing capacities to seek the facts across the most basic domains of human life production and reproduction of the working class. Little known in contemporary culture, Marx’s base-superstructure theory implicitly calls for life-capital knowledge evolution as the ultimate species advantage led by public authority with ‘plenary powers to get at the truth’.

John McMurtry Ph.D (University College London) is a fellow of the Royal Society of Canada and Professor (emeritus) of Philosophy.

Heads of State and Government, Deputy Heads of State and Your Spouses,

Heads of International Organizations,

Dr. Klaus Schwab and Mrs. Hilde Schwab,

Ladies and Gentlemen,

Dear Friends,

I’m delighted to come to beautiful Davos. Though just a small town in the Alps, Davos is an important window for taking the pulse of the global economy. People from around the world come here to exchange ideas and insights, which broaden their vision. This makes the WEF annual meeting a cost-effective brainstorming event, which I would call “Schwab economics”.

“It was the best of times, it was the worst of times.” These are the words used by the English writer Charles Dickens to describe the world after the Industrial Revolution. Today, we also live in a world of contradictions. On the one hand, with growing material wealth and advances in science and technology, human civilization has developed as never before. On the other hand, frequent regional conflicts, global challenges like terrorism and refugees, as well as poverty, unemployment and widening income gap have all added to the uncertainties of the world.

Many people feel bewildered and wonder: What has gone wrong with the world?

To answer this question, one must first track the source of the problem. Some blame economic globalization for the chaos in the world. Economic globalization was once viewed as the treasure cave found by Ali Baba in The Arabian Nights, but it has now become the Pandora’s box in the eyes of many. The international community finds itself in a heated debate on economic globalization.

Today, I wish to address the global economy in the context of economic globalization.

The point I want to make is that many of the problems troubling the world are not caused by economic globalization. For instance, the refugee waves from the Middle East and North Africa in recent years have become a global concern. Several million people have been displaced, and some small children lost their lives while crossing the rough sea. This is indeed heartbreaking. It is war, conflict and regional turbulence that have created this problem, and its solution lies in making peace, promoting reconciliation and restoring stability. The international financial crisis is another example. It is not an inevitable outcome of economic globalization; rather, it is the consequence of excessive chase of profit by financial capital and grave failure of financial regulation. Just blaming economic globalization for the world’s problems is inconsistent with reality, and it will not help solve the problems.

From the historical perspective, economic globalization resulted from growing social productivity, and is a natural outcome of scientific and technological progress, not something created by any individuals or any countries. Economic globalization has powered global growth and facilitated movement of goods and capital, advances in science, technology and civilization, and interactions among peoples.

But we should also recognize that economic globalization is a double-edged sword. When the global economy is under downward pressure, it is hard to make the cake of global economy bigger. It may even shrink, which will strain the relations between growth and distribution, between capital and labor, and between efficiency and equity. Both developed and developing countries have felt the punch. Voices against globalization have laid bare pitfalls in the process of economic globalization that we need to take seriously.

As a line in an old Chinese poem goes, “Honey melons hang on bitter vines; sweet dates grow on thistles and thorns.” In a philosophical sense, nothing is perfect in the world. One would fail to see the full picture if he claims something is perfect because of its merits, or if he views something as useless just because of its defects. It is true that economic globalization has created new problems, but this is no justification to write economic globalization off completely. Rather, we should adapt to and guide economic globalization, cushion its negative impact, and deliver its benefits to all countries and all nations.

There was a time when China also had doubts about economic globalization, and was not sure whether it should join the World Trade Organization. But we came to the conclusion that integration into the global economy is a historical trend. To grow its economy, China must have the courage to swim in the vast ocean of the global market. If one is always afraid of bracing the storm and exploring the new world, he will sooner or later get drowned in the ocean. Therefore, China took a brave step to embrace the global market. We have had our fair share of choking in the water and encountered whirlpools and choppy waves, but we have learned how to swim in this process. It has proved to be a right strategic choice.

Whether you like it or not, the global economy is the big ocean that you cannot escape from. Any attempt to cut off the flow of capital, technologies, products, industries and people between economies, and channel the waters in the ocean back into isolated lakes and creeks is simply not possible. Indeed, it runs counter to the historical trend.

The history of mankind tells us that problems are not to be feared. What should concern us is refusing to face up to problems and not knowing what to do about them. In the face of both opportunities and challenges of economic globalization, the right thing to do is to seize every opportunity, jointly meet challenges and chart the right course for economic globalization.

At the APEC Economic Leaders’ Meeting in late 2016, I spoke about the necessity to make the process of economic globalization more invigorated, more inclusive and more sustainable. We should act pro-actively and manage economic globalization as appropriate so as to release its positive impact and rebalance the process of economic globalization. We should follow the general trend, proceed from our respective national conditions and embark on the right pathway of integrating into economic globalization with the right pace. We should strike a balance between efficiency and equity to ensure that different countries, different social strata and different groups of people all share in the benefits of economic globalization. The people of all countries expect nothing less from us, and this is our unshirkable responsibility as leaders of our times.

Ladies and Gentlemen, Dear Friends,

At present, the most pressing task before us is to steer the global economy out of difficulty. The global economy has remained sluggish for quite some time. The gap between the poor and the rich and between the South and the North is widening. The root cause is that the three critical issues in the economic sphere have not been effectively addressed.

First, lack of robust driving forces for global growth makes it difficult to sustain the steady growth of the global economy. The growth of the global economy is now at its slowest pace in seven years. Growth of global trade has been slower than global GDP growth. Short-term policy stimuli are ineffective. Fundamental structural reform is just unfolding. The global economy is now in a period of moving toward new growth drivers, and the role of traditional engines to drive growth has weakened. Despite the emergence of new technologies such as artificial intelligence and 3D printing, new sources of growth are yet to emerge. A new path for the global economy remains elusive.

Second, inadequate global economic governance makes it difficult to adapt to new developments in the global economy. Madame Christine Lagarde recently told me that emerging markets and developing countries already contribute to 80% of the growth of the global economy. The global economic landscape has changed profoundly in the past few decades. However, the global governance system has not embraced those new changes and is therefore inadequate in terms of representation and inclusiveness. The global industrial landscape is changing and new industrial chains, value chains and supply chains are taking shape. However, trade and investment rules have not kept pace with these developments, resulting in acute problems such as closed mechanisms and fragmentation of rules. The global financial market needs to be more resilient against risks, but the global financial governance mechanism fails to meet the new requirement and is thus unable to effectively resolve problems such as frequent international financial market volatility and the build-up of asset bubbles.

Third, uneven global development makes it difficult to meet people’s expectations for better lives. Dr. Schwab has observed in his book The Fourth Industrial Revolution that this round of industrial revolution will produce extensive and far-reaching impacts such as growing inequality, particularly the possible widening gap between return on capital and return on labor. The richest one percent of the world’s population own more wealth than the remaining 99 percent. Inequality in income distribution and uneven development space are worrying. Over 700 million people in the world are still living in extreme poverty. For many families, to have warm houses, enough food and secure jobs is still a distant dream. This is the biggest challenge facing the world today. It is also what is behind the social turmoil in some countries.

All this shows that there are indeed problems with world economic growth, governance and development models, and they must be resolved. The founder of the Red Cross Henry Dunant once said, “Our real enemy is not the neighboring country; it is hunger, poverty, ignorance, superstition and prejudice.” We need to have the vision to dissect these problems; more importantly, we need to have the courage to take actions to address them.

Introduction

Fascism is an important political category, but a confusing one. People use the word fascism in many different ways, and often without a clear sense of what it means.

Political events since the September 11, 2001, attacks have raised the issue of fascism in new ways. People on both the right and the left have described Islamic rightist forces such as al-Qaeda and the Taliban as fascist -– but for very different reasons. Neoconservatives and Bush administration officials have denounced “Islamofascists” to help justify the so-called war on terrorism and the military occupations of Iraq and Afghanistan. By contrast, some leftists describe some of these same groups as fascist -– not to rationalize U.S. expansion, but to highlight the fact that there are major political forces today that are deadly enemies of both the left and U.S. imperialism.

At the same time, a number of liberals and leftists have warned that the United States itself is headed in a fascist direction. As I’ve argued elsewhere, the Bush administration’s authoritarian and militaristic policies are a serious threat, but they’re a world apart from fascism’s volatile mix of oppression and anti-elitism, order and insurgency. Fascism doesn’t just terrorize and repress; it uses twisted versions of radical politics in a bid to “take the game away from the left,” as Neo-Nazi leader Tom Metzger urged his followers in the 1980s. We need different strategies to fight these different forms of right-wing authoritarianism, and we need a political vocabulary that lets us tell them apart.1

Claims of impending fascism tend to reflect two underlying problems. The first is the idea that fascism is essentially a tool or strategy of big business to defend capitalist rule, and the second is vagueness about what delineates fascism from other forms of capitalist repression. We can see both of these problems in pronouncements from several different U.S. leftist organizations (such as the Communist Party, Socialist Workers Party, Revolutionary Communist Party, and Socialist Labor Party), in leftist and left-liberal media organs such as CounterPunch and Common Dreams, and in numerous websites and online discussions among U.S. activists.2

A recent sophisticated example of both problems comes from Marxist academicians Gregory Meyerson and Michael Joseph Roberto. In an October 2006 Monthly Review article, “It Could Happen Here,” they argue that “fascism is a plausible response by the U.S. bourgeoisie to the general crisis of Pax Americana” and, although the outcome of the crisis remains unclear, “evidence is mounting for what we are calling a fascist trajectory.” Meyerson and Roberto see fascism as an intrinsic structural tendency of capitalism in crisis, a form of rule that is promoted strictly from the top down. “Only the ruling class can institute fascist processes,” they argue. Although they acknowledge the existence of fascist movements, “the Marxist view,” they claim, “does not focus primarily on fascist mass movements because they are not primary engines of fascism.”3

Even if we accept this concept of fascism (and of Marxism), Meyerson and Roberto never explain concretely what they mean by fascist rule. They emphasize that fascism needs to be understood in functional terms, as a form of capitalist rule in crisis, and they criticize descriptive definitions of fascism on the grounds that these obscure its changing historical character. A U.S. fascist trajectory “will look quite different from past fascist trajectories,” and will “unfold in a bipartisan context, liberals and conservatives acting in concert -– the whole ruling class.” But since Meyerson and Roberto don’t tell us what fascism will look like, how will we know it’s happening? The substance of their argument seems to be that the growing crisis may persuade most representatives of capital that they need to establish a much more repressive and authoritarian state. This is a serious and wholly justified concern, but it’s a simple point that doesn’t require elaborate arguments about functionalism and structural tendencies. And we gain nothing, but lose much, by calling the result fascism.

The concept of fascism is indeed highly relevant for analyzing current political threats, but not in the way that Meyerson and Roberto maintain. Fascism can help us understand a range of political phenomena that the U.S. ruling class didn’t initiate and does not control. These phenomena are part of a crisis that goes far beyond the decline of U.S. global hegemony and the American welfare state, to include the following:

Across eastern Europe and northern Asia, the collapse of the Soviet bloc, followed in many countries by a drastic decline of living standards and the rise of large-scale criminality and a host of right-wing nationalist movements.

In many parts of Asia, Africa, and Latin America, the cooptation or defeat of revolutionary leftist insurgencies and governments and the growth of diverse populist or religious-based oppositional forces.

In much of the world, the acceleration of capitalist globalization dynamics such as capital flight, international mass migration, commodification of women’s labor, the growth of international mass culture, and the erosion of traditional local institutions –- and the upsurge of ambivalent or hostile responses to all of these from various points on the political spectrum.

In this volatile mix, fascism is an important reference point -– not just as a developed political force but also as a tendency or potential within broader movements. It is both distinct from and at odds with top-down capitalist authoritarianism. In addition, while fascism takes shape in a capitalist context, it isn’t a functional consequence of capitalist development, analogous (as Meyerson and Roberto suggest) to imperialism. Rather, it is a political current, which -– like socialism, liberalism, or conservatism –- embodies its own set of ideas, policies, organizational forms, and bases of support. Like all major political currents, fascism exists in multiple variations and evolves dynamically to address new historical conditions. This means that no definition of fascism is the one true, final answer. But defining –- or at least describing –- fascism can help us to grasp fascism’s key features, delineate its relationship with other forces, and explore how it develops and how it can be fought.

Jan 1, 2016 – We are nearing 2016, the year when the richest 1 percent of humanity will own more than the rest of the world, according to projections made by the nongovernmental organization Oxfam.

This is up from the 1 percent owning 44 percent of the world’s wealth in 2010 and 48 percent in 2014. If current trends continue, the 1 percent will own 54 percent by 2020.

The top 80 billionaires were worth $1.9 trillion in 2014, an amount equal to the bottom 50 percent. These 80 billionaires saw a 50 percent rise in their wealth in just four years, from 2010 to 2014, during which time the poorest 50 percent saw a drop in their wealth. In other words, there has been a huge transfer of wealth in a very short period of time from the poorest half of humanity to the richest 80 individuals on the planet.

Capitalism produces social inequalities as a consequence of its own internal workings.

What should we do in the face of these escalating worldwide inequalities? In his worldwide bestseller, Capital in the Twenty-First Century, French economist Thomas Piketty argued for a global tax on capital and redistribution through progressive tax reform. The book has gained traction globally perhaps because its prescriptions converge with the reformist agenda of a rising number of transnational elites and intelligentsia, who have become concerned that the turmoil sparked by such egregious inequalities may destabilize global capitalism and threaten their control. Like Piketty, they have been calling for mildly redistributive measures, such as increased taxes on corporations and the rich, a more progressive income tax, the reintroduction of social welfare programs and a "green capitalism."

This reformist approach to global inequality, however, is entirely inadequate because it bypasses the questions of power and of corporate control over the planet’s productive resources that are at the very heart of global capitalism and its crisis. Any resolution to this crisis requires a radical redistribution of wealth and power downward to the poor majority of humanity. Social justice requires a measure of transnational social governance over the global production and financial system as a necessary first step in this radical redistribution, which in turn must be linked to the transformation of class and property relations.

Seen in this perspective, the elites’ reformist approach has more to do with averting such a transformation than with resolving the plight of the poor majority. The power relations that are at stake become clear by exploring what accounts for social inequalities under capitalism.

Causes of Rising Inequality

What accounts for escalating worldwide inequalities that have so alarmed transnational elites? As Marx analyzed in Capital, there is something going on in the capitalist system itself beyond sets of government policies that generates inequalities. Simply put, capitalists own the means of producing wealth, and therefore appropriate as profits as much as possible of the wealth that society collectively produces. Capitalism produces social inequalities as a consequence of its own internal workings.

The global market has not been able to absorb the output of the global economy.

But such inequalities end up undermining the stability of the system, since the mass of working people cannot purchase the wealth that pours out of the capitalist economy to the extent that capitalists and the well-off retain more and more of total income relative to that which goes to labor. If capitalists cannot actually sell (or "unload") the products of their plantations, factories and offices, then they cannot make a profit.

This is what in critical political economy constitutes the underlying internal contradiction of capitalism, or the overaccumulation problem. Left unchecked, expanding social polarization results in crisis – in recessions and depressions, such as the 1930s Great Depression or the 2008 Great Recession. Worse still, it engenders great social upheavals, political conflicts, wars and even revolutions – precisely the kinds of conflicts and chaos we are witnessing in the world today.

In the view of the reformers, however, it is not the capitalist system itself, but its particular institutional organization that is to blame for inequalities. They believe it can be offset by increased taxes, social welfare programs and other reformist measures.

The Class Warfare of the Transnational Capitalist Class

The sharp escalation in inequalities coincides with capitalist globalization from the 1970s and on. The high rates of inequality registered in the wake of the Industrial Revolution, and that reached a peak in the late 19th and early 20th centuries, had diminished somewhat in the heartlands of world capitalism in the wake of two world wars and the Great Depression. Inequalities in the rich countries were diminished in part thanks to colonialism and imperialism, which resulted in the transfer of surplus wealth from the periphery to the metropolitan centers of world capitalism and made possible the rise of a "labor aristocracy" in these centers.

What became known as the "Fordist-Keynesian" social order that took shape in the 30 years following World War II involved high growth rates, a rise in living standards for substantial sectors of the working class and a decrease in inequalities in the developed core of world capitalism.

Three Sides to Every Story

By Fu Ying

Chair of the Foreign Affairs Committee of China’s National People’s Congress.

Dec 18, 2015 –CRI Online

At a time when Russian relations with the United States and western European countries are growing cold, the relatively warm ties between China and Russia have attracted renewed interest. Scholars and journalists in the West find themselves debating the nature of the Chinese-Russian partnership and wondering whether it will evolve into an alliance.

Since the end of the Cold War, two main views have tended to define Western assessments of the Chinese-Russian relationship and predictions of its future. The first view holds that the link between Beijing and Moscow is vulnerable, contingent, and marked by uncertainties—a “marriage of convenience,” to use the phrase favored by many advocates of this argument, who see it as unlikely that the two countries will grow much closer and quite possible that they will begin to drift apart. The other view posits that strategic and even ideological factors form the basis of Chinese-Russian ties and predicts that the two countries—both of which see the United States as a possible obstacle to their objectives—will eventually form an anti-U.S., anti-Western alliance.

Neither view accurately captures the true nature of the relationship. The Chinese-Russian relationship is a stable strategic partnership and by no means a marriage of convenience: it is complex, sturdy, and deeply rooted. Changes in international relations since the end of the Cold War have only brought the two countries closer together. Some Western analysts and officials have speculated (and perhaps even hoped) that the ongoing conflicts in Syria and Ukraine, in which Russia has become heavily involved, would lead to tensions between Beijing and Moscow—or even a rupture. But that has not happened.

Nevertheless, China has no interest in a formal alliance with Russia, nor in forming an anti-U.S. or anti-Western bloc of any kind. Rather, Beijing hopes that China and Russia can maintain their relationship in a way that will provide a safe environment for the two big neighbors to achieve their development goals and to support each other through mutually beneficial cooperation, offering a model for how major countries can manage their differences and cooperate in ways that strengthen the international system.

TIES THAT BIND

On several occasions between the end of the nineteenth century and the middle of the twentieth century, China entered into an alliance with the Russian empire and its successor, the Soviet Union. But every time, the arrangement proved short-lived, as each amounted to nothing more than an expediency between countries of unequal strength. In the decades that followed, the two powerful communist-led countries muddled through, occasionally cooperating but often riven by rivalry and mistrust. In 1989, in the waning years of Soviet rule, they finally restored normalcy to their relations. They jointly declared that they would develop bilateral relations based on “mutual respect for sovereignty and territorial integrity, mutual nonaggression, noninterference in each other’s internal affairs, equality and mutual benefit, and peaceful coexistence.” Two years later, the Soviet Union disintegrated, but Chinese-Russian relations carried on with the principle of “no alliance, no conflict, and no targeting any third country.”

Soon thereafter, the newborn Russian Federation embraced the so-called Atlanticist approach. To win the trust and help of the West, Russia not only followed Western prescriptions for economic reform but also made concessions on major security issues, including reducing its stockpile of strategic nuclear weapons. However, things didn’t turn out the way the Russians had hoped, as the country’s economy tanked and its regional influence waned. In 1992, disappointed with what they saw as unfulfilled pledges of American and European assistance and irritated by talk of NATO’s eastward expansion, the Russians began to pay more attention to Asia. That year, China and Russia announced that each would regard the other as a “friendly country” and issued a joint political statement stipulating that “the freedom of people to choose their own development paths should be respected, while differences in social systems and ideologies should not hamper the normal progress of relations.”

Ever since, Chinese-Russian relations have gradually improved and deepened. During the past 20 years or so, bilateral trade and investment have expanded on a massive scale. In 2011, China became Russia’s largest trading partner. In 2014 alone, China’s investment in Russia grew by 80 percent—and the trend toward more investment remains strong. To get a sense of the growth in economic ties, consider that in the early 1990s, annual bilateral trade between China and Russia amounted to around $5 billion; by 2014, it came close to $100 billion. That year, Beijing and Moscow signed a landmark agreement to construct a pipeline that, by 2018, will bring as much as 38 billion cubic meters of Russian natural gas to China every year. The two countries are also planning significant deals involving nuclear power generation, aerospace manufacturing, high-speed rail, and infrastructure development. Furthermore, they are cooperating on new multinational financial institutions, such as the Asian Infrastructure Investment Bank, the New Development Bank BRICS, and the BRICS foreign exchange reserve pool.

Meanwhile, security ties have improved as well. China has become one of the largest importers of Russian arms, and the two countries are discussing a number of joint arms research-and-development projects. Extensive Chinese-Russian defense cooperation involves consultations between high-level military personnel and joint training and exercises, including more than a dozen joint counterterrorism exercises during the past decade or so, carried out either bilaterally or under the auspices of the Shanghai Cooperation Organization. In the past 20 years, thousands of Chinese military personnel have studied in Russia, and many Russian military officials have received short-term training at the National Defense University of China.

As economic and military links have strengthened, so, too, have political ones. In 2008, China and Russia were able to peacefully resolve territorial disputes that had troubled relations for decades, formally demarcating their 2,600-mile-plus border and thus eliminating their single largest source of tension—a rare achievement for big neighbors. In recent years, the two countries have held regular annual meetings between their heads of states, prime ministers, top legislators, and foreign ministers. Since 2013, when Xi Jinping became president of China, he has paid five visits to Russia, and Russian President Vladimir Putin has traveled three times to China in the same time period. All told, Xi and Putin have met 12 times, making Putin the foreign head of state whom Xi has met most frequently since assuming the presidency.

MANAGING DIFFERENCES

For all this progress, differences still exist between the two neighbors, and they don’t always share the same focus when it comes to foreign policy. Russia is traditionally oriented toward Europe, whereas China is more concerned with Asia. The two countries’ diplomatic styles differ as well. Russia is more experienced on the global theater, and it tends to favor strong, active, and often surprising diplomatic maneuvers. Chinese diplomacy, in contrast, is more reactive and cautious.

China’s rise has produced discomfort among some in Russia, where some people have had difficulty adjusting to the shift in relative power between China and Russia. There is still talk in Russia of “the China threat,” a holdover expression from past eras. A poll conducted in 2008 by Russia’s Public Opinion Foundation showed that around 60 percent of Russians were concerned that Chinese migration to Far Eastern border areas would threaten Russia’s territorial integrity; 41 percent believed that a stronger China would harm Russian interests. And as China’s quest for new investment and trade opportunities abroad has led to increased Chinese cooperation with former Soviet states, Russians have worried that China is competing for influence in their neighborhood. Partly as a result, Moscow initially hesitated to support Beijing’s Silk Road Economic Belt initiative before ultimately embracing it in 2014. Meanwhile, some Chinese continue to nurse historical grievances regarding Russia. Despite the resolution of the border issue, Chinese commentators sometimes make critical references to the nearly 600,000 square miles of Chinese territory that tsarist Russia annexed in the late nineteenth century.

David Harvey: ‘The Left Has to Rethink Its Theoretical and Tactical Apparatus.’

FROM ROAR MAGAZINE. David Harvey, one of the leading Marxist thinkers of our times, sits down with the activist collective AK Malabocas to discuss the transformations in the mode of capital accumulation, the centrality of the urban terrain in contemporary class struggles, and the implications of all this for anti-capitalist organizing.

AK Malabocas: In the last forty years, the mode of capital accumulation has changed globally. What do these changes mean for the struggle against capitalism?

David Harvey: From a macro-perspective, any mode of production tends to generate a very distinctive kind of opposition, which is a curious mirrored image of itself. If you look back to the 1960s or 1970s, when capital was organized in big corporatist, hierarchical forms, you had oppositional structures that were corporatist, unionist kinds of political apparatuses. In other words, a Fordist system generated a Fordist kind of opposition.

With the breakdown of this form of industrial organization, particularly in the advanced capitalist countries, you ended up with a much more decentralized configuration of capital: more fluid over space and time than previously thought. At the same time we saw the emergence of an opposition that is about networking and decentralization and that doesn’t like hierarchy and the previous Fordist forms of opposition.

So, in a funny sort of way, the leftists reorganize themselves in the same way capital accumulation is reorganized. If we understand that the left is a mirror image of what we are criticizing, then maybe what we should do is to break the mirror and get out of this symbiotic relationship with what we are criticizing.

In the Fordist era, the factory was the main site of resistance. Where can we find it now that capital has moved away from the factory floor towards the urban terrain?

First of all, the factory-form has not disappeared—you still find factories in Bangladesh or in China. What is interesting is how the mode of production in the core cities changed. For example, the logistics sector has undergone a huge expansion: UPS, DHL and all of these delivery workers are producing enormous values nowadays.

In the last decades, a huge shift has occurred in the service sector as well: the biggest employers of labor in the 1970s in the US were General Motors, Ford and US Steel. The biggest employers of labor today are McDonalds, Kentucky Fried Chicken and Walmart. Back then, the factory was the center of the working class, but today we find the working class mainly in the service sector. And why would we say that producing cars is more important than producing hamburgers?

Unfortunately the left is not comfortable with the idea of organizing fast-food workers. Its picture of the classical working class doesn’t fit with value production of the service workers, the delivery workers, the restaurant workers, the supermarket workers.

The proletariat did not disappear, but there is a new proletariat which has very different characteristics from the traditional one the left used to identify as the vanguard of the working class. In this sense, the McDonalds workers became the steel workers of the twenty-first century

If this is what the new proletariat is about, where are the places to organize resistance now?

It’s very difficult to organize in the workplaces. For example, delivery drivers are moving all over the place. So this population could maybe be better organized outside the working place, meaning in their neighborhood structures.

There is already an interesting phrase in Gramsci’s work from 1919 saying that organizing in the workplace and having workplace councils is all well, but we should have neighborhood councils, too. And the neighborhood councils, he said, have a better understanding of what the conditions of the whole working class are compared to the sectoral understanding of workplace organizing.

Workplace organizers used to know very well what a steelworker was, but they didn’t understand what the proletariat was about as a whole. The neighborhood organization would then include for example the street cleaners, the house workers, the delivery drivers. Gramsci never really took this up and said: ‘come on, the Communist Party should organize neighborhood assemblies!’

Nevertheless, there are a few exceptions in the European context where Communist Parties did in fact organize neighborhood councils—because they couldn’t organize in the workplace, like in Spain for example. In the 1960s this was a very powerful form of organizing. Therefore—as I have argued for a very long time—we should look at the organization of neighborhoods as a form of class organization. Gramsci only mentioned it once in his writings and he never pursued it further.

In Britain in the 1980s, there were forms of organizing labor in city-wide platforms on the basis of trades councils, which were doing what Gramsci suggested. But within the union movement these trades councils were always regarded as inferior forms of organizing labor. They were never treated as being foundational to how the union movement should operate.

In fact, it turned out that the trades councils were often much more radical than the conventional trade unions and that was because they were rooted in the conditions of the whole working class, not only the often privileged sectors of the working-class. So, to the extent that they had a much broader definition of the working class, the trades councils tended to have much more radical politics. But this was never valorized by the trade union movement in general—it was always regarded as a space where the radicals could play.

The advantages of this form of organizing are obvious: it overcomes the split between sectoral organizing, it includes all kinds of “deterritorialized” labor, and it is very suitable to new forms of community and assembly-based organization, as Murray Bookchin was advocating, for example.

In the recent waves of protest—in Spain and Greece, for instance, or in the Occupy movement—you can find this idea of “localizing resistance.” It seems that these movements tend to organize around issues of everyday life, rather than the big ideological questions that the traditional left used to focus on.

Why would you say that organizing around everyday life is not one of the big questions? I think it is one of the big questions. More than half of the world’s population lives in cities, and everyday life in cities is what people are exposed to and have their difficulties in. These difficulties reside as much in the sphere of the realization of value as in the sphere of the production of value.

This is one of my very important theoretical arguments: everybody reads Volume I of Capital and nobody reads Volume II. Volume I is about the production of value, Volume II is about the realization of value. Focusing on Volume II, you clearly see that the conditions of realization are just as important as the conditions of production.

By Robin Blackburn

Sven Beckert has produced a fascinating and wide-ranging history of cotton, from its early appearance in household production in Asia thousands of years ago, via its modest debut in local exchanges, to its eventual role as a key ingredient in the Industrial Revolution and its continuing importance for today’s consumers, poor or rich. [1] Importantly, this is an account of both stages of cotton’s production, in the fields as well as the factories, agriculture as well as manufacture. A German historian now based in the United States, Beckert is the author of The Monied Metropolis (2001), a study of the consolidation of New York’s bourgeoisie in the latter half of the nineteenth century. His new book, Empire of Cotton, is enriched by research into documents and archives from two dozen countries. This is by no means untrodden territory. Giorgio Riello in his—also prizewinning—Cotton: The Fabric that Made the Modern World (2013) has recently provided a fascinating account of how and why Asia’s manufacturers (for him, India’s in particular) were displaced by Europe’s. Both are works of much greater ambition than the general run of commodity histories—anecdotal narratives of cod, coal or tobacco, for instance. For its part, Empire of Cotton is closer in explanatory reach to Sidney Mintz’s path-breaking story of sugar, Sweetness and Power (1985), though through the lens of economic history, not cultural anthropology. Beckert aims to recast our understanding of ‘the making and remaking of global capitalism’, and with it the modern world.

Archaeological evidence suggests that cotton production emerged almost simultaneously in the Indian subcontinent and the Americas around 3000 bc; flax and wool—and, in China, silk and ramie—had been spun and woven for at least four millennia before that. Versatile, hard-wearing, washable and easily dyed, cotton rapidly became an important item in the household economies of India, China, West Africa, Anatolia and Pre-Columbian Mexico and Peru; planted alongside food crops and processed in the gaps between other agricultural tasks, often in the evenings, with women spinning while men wove. By the fourth century bc, Gujarati cotton textiles were traded along the Indian Ocean rim as far as East Africa; they would reach China and Southeast Asia by 200 bc. By around ad 1400, large-scale cotton workshops were established in Dhaka and Baghdad, while ‘urban loom houses’ in Ming China employed thousands of workers.

Europe was the exception: it did not grow cotton, which requires a frost-free growing season, and for long did not import it in quantity either, though European merchants and consumers were gradually educated to appreciate the finer Indian muslins and calicoes. The turning point, in Beckert’s account, came with European entry into Subcontinental commercial networks, gathering momentum in the seventeenth century as Britain prevailed in the Anglo–Dutch wars and established a semi-monopoly over India’s external textile trade; by the mid-eighteenth century, he notes, cotton cloth constituted over 75 per cent of East India Company exports. It was shipped both to Europe, to satisfy increasing domestic consumption, and to Africa, where rulers and merchants often demanded Indian cotton cloth in exchange for slaves. The fabric ‘became entangled in a three-continent-spanning system’, in which ‘the products of Indian weavers paid for slaves in Africa to work on the plantations in the Americas to produce agricultural commodities (sugar and tobacco) for European consumers.’ In Beckert’s summary: ‘Europeans had invented a new way of organizing economic activity.’

Modest domestic cotton industries in seventeenth- and eighteenth-century England and France operated on the putting-out system, importing the raw material from the Ottoman Empire; but the cost of transportation was too high and, compared with silk, the price it fetched too low, for it to be profitable. Raw cotton only really entered global commerce in the late eighteenth century, with the industrial take-off in Lancashire. Beckert posits international competition in cotton textiles as the key driver for the Industrial Revolution: English manufacturers—often already linked into New World plantation networks and well-acquainted with the buoyancy of global markets—faced the problem of competing with high-quality yet cheap Indian cloth; the putting-out system was resistant to drives for higher productivity, while Lancashire wages in 1770 were some six times higher than those in India. This spurred the search for innovations to raise productivity: the flying shuttle (1733), spinning jenny (around 1763–64), water frame (1769), Crompton’s mule (1779). Watt’s steam engine (patented 1769) would give an enormous impetus to these developments, which were brought together in the factory system. As Beckert notes, hundreds of thousands of labourers were also looking for waged employment because they owned no land. Canals, turnpikes and refurbished ports helped British manufacturers bring their wares to market at home and overseas.

The rise of the cotton factory, powered by water or steam, created an explosion in demand for raw cotton, which Levantine and Caribbean producers struggled to meet—opening the way for cotton-growing on the slave plantations in North and South America. Up to this point, long-staple cotton came mainly from the islands and coastal enclaves on the Gulf and in South Carolina. From the mid-1790s, Eli Whitney’s ‘ginning machine’ enabled the short-staple ‘up-country’ cotton, grown inland, to be processed. The perfection of this device over a couple of decades set the stage for a massive increase in cotton cultivation in the Mississippi Valley and South West, itself a response to the major role of cotton textiles in European industrialization. Nearly half of the 12 million slaves shipped from Africa to the New World arrived after 1780; many of those who toiled on the cotton plantations would be supplied by a domestic us slave trade that remained vigorous up to the 1850s. By this time the us cotton crop, only a few thousand pounds in 1800, was soaring above 2 billion lbs, supplying two-thirds of us exports; some 67 per cent of the total crop was grown on land that had not been part of the us in 1800.